Chlamydia trachomatis is the leading cause of preventable blindness and a major cause of sexually transmitted disease. Chlamydiae are obligate intracellular bacteria that are characterized by their unique complex biphasic growth cycle that modulates between infectious particles termed elementary bodies (EB) and non-infectious metabolical active particles termed reticulate bodies (RB). In the presence of IFN-gamma chlamydiae produce persistent infections in vitro, a host-parasite interaction that is believed to mediate in vivo chronic inflammatory disease. The genes that control the biphasic developmental cycle and IFN-gamma mediated persistent infection are unknown. We have used DNA microarray for transcriptional profiling chlamydial gene expression both during the natural infection growth cycle and during persistence, and reactivation from persistence. This approach has led to the identification of a small subset of genes that control the primary (immediate-early genes) and secondary (late genes) differentiation stages of the cycle. Immediate-early gene products initiate bacterial metabolism and potentially modify the bacterial phagosome to escape fusion with lysosomes. One immediate early gene (CT147) is of the human early endosomal antigen-1 that is localized to the chlamydial phagosome; suggesting a functional role for CT147 in establishing the parasitophorous vacuole in a non-fusogenic pathway. Late gene products terminate bacterial cell division and constitute structural components and remodeling activities involved in the formation of the highly disulfide cross-linked outer-membrane complex that functions in attachment and invasion of new host cells. Many of the genes expressed during the immediate-early and late differentiation stages are chlamydia-specific and have evolutionary origins in eukaryotic lineages. Genes involved in tryptophan utilization, DNA repair and recombination, phospholipid utilization, protein translation and general stress were up-regulated during persistence. Down-regulated genes during persistent growth were chlamydial late genes, and genes involved in proteolysis, peptide transport, and cell division. Persistence was characterized by altered but active biosynthetic processes with continued replication of the chromosome. Upon removal of IFN-gamma chlamydiae rapidly re-entered the normal developmental cycle and reversed transcriptional changes associated with cytokine treatment. The coordinated transcriptional response to IFN-gamma implies a chlamydial response stimulon has evolved to control the transition between acute and persistent growth of the pathogen. In contrast to the paradigm of persistence as a general stress response, our findings suggest persistence is an alternative life cycle employed by chlamydiae to avoid host inflammatory responses In summary, our findings identify new early and late genes that have important functions in modifying the host response to infection and in the remodeling of the chlamydial cell wall and outer membrane in transition form RB to EB. Moreover, transcriptome analysis of persistent infection has uncovered a chlamydial response stimulon that explains how chlamydiae persistent in cells and how they can become reactivated form persistence. These findings have considerable potential for the development of new and novel anti-chlamydial infectives.